Let me first of all draw attention to the words of a remarkable economist and moral philosopher, so I can fetch more insights from his arsenal of thoughts and imperishable wisdom? Adam Smith wrote and I quote
“As every individual…endeavour as much as he can both to employ his capital in the support of the domestic industry, and so direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.”
Confidently we can refer a butcher, brewer, tele-communication provider and the baker as industrialists or entrepreneurs. But for the sake of this discuss I would prefer to refer to them as capitalists. The subject of discuss is that it is not from the goodwill of these capitalists that the public expects its means of livelihood and sustenance but, from the regards of these capitalists to their own personal interest. To query the morality of this sentence is akin to querying the morality of capitalism.
Certainly the principal aim of every investor is to make maximum profit, therefore, he has to decipher and work out how to either train or find quality workers who will produce durable product; he must discover to cut cost so as to make affordable products; he has to develop strategies to market and distribute his product so it can reach as many potential buyers as possible, he sure must also figure out ways to finance his business so it can successfully meet up with future growth. All of these largely depend on the mind of the businessman, and are mostly powered by his quest for security and personal interest which practically isn’t immoral as long as he doesn’t violate the laws of justice.
The aggregate product of the dedication of the capitalist to thoughts, persuasion, and strategic reasoning is the virtue that our lives and prosperity depends on. In other words, it is truthful that it is not from the benevolence of the capitalist that others expect goods or services but from the regard of the capitalist to his own interest which in another sense is also a demand for product or service by consumers. This is the moral meaning of the law of supply and demand. It should be noted that producers make bigger than life losses when the demand of the consumers are not adequately met, thereby leading to consumers looking for alternatives. The demand of the consumers is also the interest of the producers. For what reason under the sun will a baker bake bread that consumers won’t and never consume?
In a free market system everyone is morally compelled by his own ambitions to achieve personal goals. The market system advocates that no one demands the labour and wealth of another without willing to offer or trade something valuable as an exchange. If any party to the trade doesn’t gain or achieve anything in return, in terms of product, goods, or service; that will be immoral.
The rule of capitalism according to Adam Smith is that trade occurs by mutual consent and to mutual advantage. It has been observed that the most important recipe for building and advancing the human society isn’t out-rightly love like we religiously say, or even friendship, rather mutual benefits and team work.
The sole aim for production is for consumption. This is a sort of exchange between the producer and the consumer, people engage in exchange simply because they desire what others have that they don’t possess. Exchange is achieved without coercion; rather it is built within the structure of justice and morality. The baker must bake the bread that suits its patron else they won’t come back and every business person knows that his continuous profit lies in his ability not just to make customers, but also in his canny ability to make them come back again and again else, he won’t be long in business.
“Though the earth, and all inferior creatures, be common to all men, yet every man has a property in his own person: this nobody has any right to but himself. The labour of his body, and the works of his hands, we may say, are properly his. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property.”
By critically analyzing the words of John Locke, an ace philosopher, it becomes clear without any iota of doubt that nobody has all the rights to himself. In the same way a producer has the right to reason logically and then produce, but whose right is it to endlessly depend on aid or the benevolence acts of others like many African nations do? No man or state gains independence of any sort by always depending on others. To tell the truth, to depend on the benevolence act of others is to shortchange oneself from personally creating unlimited wealth. Or with what prism of morality are we going to justify that some should get something for nothing? That would be a gross act of injustice and also the peak of immorality.
When we erroneously misconstrue the chase of a man’s interest or goal to produce and become wealthy with “selfishness”, then we become dishonest. There is little or no reason to think so and many reasons to think not. Though we may rightly say that the primary purpose of those in markets is to make profit which in itself is a purpose of self, didn’t even the great law of Christianity say a man should only love his neighbour the measure he loves himself. In spite of that, is it practically possible for anyone in business to achieve this so called “self interest”; without meeting the needs and interest of others, either by providing goods (be it bread, meat, gas or wine) or services, without employing workers thereby creating wealth and alienating poverty? Come to think of it, besides that Bill Gate’s utmost goal was to put goods and accessible computers on the tables of many made him one of the world’s richest that also engendered him to give massively to the interest of the underprivileged-who probably were not a part of his initial goal. What can be more moral? Just as two blind men can’t help themselves, the same, two waiters of benevolence act can’t.
Capitalism is a market system based on moral philosophy and justification. Capitalism supports the universal law of sowing and reaping. It is not morally wrong to put your money where your mouth is, or to have dreams that provide the needs of others and pursue it for the sake of personal interest that no one else can properly attend to. No one feels the pain of another except for the bearer of the pain. It would be rather ruthless to reap where one did not sow.
'Lanre Olagunju is a prize winner with AfricanLiberty.org and wrote in from Lagos, Nigeria
References
- Extract from The Wisdom of Adam Smith, Benjamin Rogge (Ed) 1976. Indianapolis: Liberty Fund.
- Rand, Ayn. What Is Capitalism? In Capitalism: The Unknown Ideal (1966). New York. Signet (Accessed from the IPN’s Ideas For A Free Society CD).
- Rogge, Benjamin A. (Ed) 1976. Monopoly versus Free Trade {by Adam Smith}. In The Wisdom of Adam Smith. Indianapolis: Liberty Fund. 129-142.
- An interview with Adam Smith Professor Edwin West (1922 – 2003).
- Twenty Myths about Markets by Tom Palmer, Senior fellow Cato Institute. Delivered at conference on The Institutional Framework for Freedom in Africa, 2007 Regional Meeting, Mont Pelerine Society , Nairobi, Kenya. (Accessed from the IPN’s Ideas For A Free Society CD).
- Two Treatises of Government (1824 ed.) (Accessed from the IPN’s Ideas For A Free Society CD).
- Wikipedia. www.wikipedia.com/capitalism.
- The Moral Basis of Capitalismby Robert W. Tracinski. www.capitalismcentre.org